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Government Drafts Gender Pay Gap Proposals

By February 17, 2016February 22nd, 2016Legal Update
Gender Pay Gap | HR Solutions

The Government has published draft legislation outlining how it plans to legislate gender pay gap reporting for all large UK businesses.

The Equality Act 2010 (Gender Pay Gap Information) Regulations 2016 are expected to come into force in October.

The proposals state that:

  • Any business with more than 250 employees will need to publish an annual snapshot of their mean and median gender pay gaps.
  • They will also need to publish the difference between their mean bonus payments to men and women and the proportion of male and female employees that received a bonus.
  • These organisations will also need to divide their pay distribution into four bands and work out the number of men and women in each quartile.

The data must be published in English on a UK website and reported to the Government. Overtime information and differentiation between full-time and part-time employees will not be required.

These results will form a sector-based league table, so that businesses can be openly compared against their competitors.

The Government says that businesses with more than 250 employees account for 34% of the total UK workforce. These businesses will need to provide their first annual report in April 2018 (using the pay rates as of 30th April 2017).

At present this will only apply to private sector and voluntary organisations. The Government intends to extend the scheme to public sector employers as well, but it will require separate legislation to do so.

Dianah Worman, diversity adviser at the CIPD, said that action on the gender pay gap is welcome but the use of league tables may not work as intended.

“This will likely draw the attention of women to the lower earnings potential they will have to face in forging a career in the STEM areas, where they are already seriously under-represented. It could disincentivise women from exploring opportunities in the very areas Government wants to see more women working, in order to remove the gender pay gap.”

“Also, the use of naming and shaming as a sanction against organisations for failing to report what they find could also hinder meaningful and sustainable change. It might encourage quick fixes which could be inaccurate reflections of real progress.”

Minister for women and equalities Nicky Morgan said: “In recent years we’ve seen the best employers make ground breaking strides in tackling gender inequality. But the job won’t be complete until we see the talents of women and men recognised equally and fairly in every workplace.”

“That’s why I am announcing a raft of measures to support women in their careers from the classroom to the boardroom, leaving nowhere for gender inequality to hide.”

A public consultation on the plans is open until March 11th.

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